The Lloyd’s of London insurance market posted a second consecutive year of improved underwriting results in 2022, according to a new report by ALIRT Insurance Research.
Lloyd’s improved performance in recent years followed the 2018 introduction of a more stringent performance review regimen, ALIRT said.
The Lloyd’s market consists of about 95 underwriting syndicates. The market reported an overall combined ratio of 91.9% in 2022, its strongest performance since 2015 despite the adverse impacts of inflation and catastrophic weather events, ALIRT reported.
However, large unrealized losses in market participants’ investment portfolios led to an overall operating loss for the year – the Lloyd’s market’s fourth such loss in the last six years.
In its Lloyd’s of London Market Overview – 2022 report, ALIRT examines the overall market’s premium growth, underwriting metrics, investment performance, and operating returns over the past 10 years.
The report also discusses the strongest and weakest syndicate performances last year, as measured by the firm’s proprietary ALIRT Analyses.
“It is sometimes necessary to take one step back to take two steps forward,” ALIRT said. “The Lloyd’s market took this idiom to heart when it decided in 2018 to refocus its underwriting efforts on achieving sustainable underwriting profitability. While it is always painful to walk back revenue and established distribution relationships, that is precisely what the market did over several years – and it is reaping the benefit of that strategy now.”
ALIRT predicted that the Lloyd’s market would continue to rebound this year due to the persistent firm rate environment. However, the analytics firm pointed to global economic conditions and the frequency and severity of catastrophic losses as factors that could impact future performance.
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